<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
RPC INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
RPC, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
2170 PIEDMONT ROAD, NE, ATLANTA, GEORGIA 30324
TO THE HOLDERS OF THE COMMON STOCK:
PLEASE TAKE NOTICE that the 1999 Annual Meeting of Stockholders of RPC,
Inc., a Delaware corporation (the "Company"), will be held at the Company's
offices located at 2170 Piedmont Road, NE, Atlanta, Georgia, on Tuesday, April
27, 1999, at 9:00 A.M., or any adjournment thereof, for the following purposes:
(1) To elect three Class I directors to the Board of Directors; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Proxy Statement dated April 1, 1999, is attached.
The Board of Directors has fixed the close of business on February 26, 1999,
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting.
Stockholders who do not expect to be present at the meeting are urged to
complete, date, sign and return the enclosed proxy. No postage is required if
the enclosed envelope is used and mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
Linda H. Graham, Secretary
Atlanta, Georgia
April 1, 1999
<PAGE>
PROXY STATEMENT
This Proxy Statement and a form of proxy were first mailed to stockholders
on or about April 1, 1999.
The following information concerning the enclosed proxy and the matters to
be acted upon at the Annual Meeting of Stockholders to be held on April 27,
1999, is submitted to the stockholders for their information.
SOLICITATION OF AND POWER TO REVOKE PROXY
A form of proxy is enclosed. Each proxy submitted will be voted as directed,
but if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted in favor of the candidates for election to the Board
of Directors.
A stockholder executing and delivering a proxy has power to revoke the same
and the authority thereby given at any time prior to the exercise of such
authority if he so elects, by contacting either proxyholder.
CAPITAL STOCK
The outstanding capital stock of the Company on February 26, 1999 consisted
of 28,649,450 shares of Common Stock, par value $0.10 per share. Holders of
Common Stock are entitled to one vote (non-cumulative) for each share of such
stock registered in their respective names at the close of business on February
26, 1999, the record date for determining stockholders entitled to notice of and
to vote at the meeting or any adjournment thereof.
The name and address of each stockholder who owned beneficially five percent
(5%) or more of the shares of Common Stock of the Company on February 26, 1999,
together with the number of shares so owned and the percentage of outstanding
shares that ownership represents, and information as to Common Stock ownership
of the Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company (the "Named Executives"), and the
executive officers and directors of the Company as a group (according to
information received by the Company), is set out below:
<TABLE>
<CAPTION>
AMOUNT PERCENT OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED(1) SHARES
- --------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
R. Randall Rollins..................................................................... 15,651,647(2) 54.6
2170 Piedmont Road, NE
Atlanta, Georgia
Gary W. Rollins........................................................................ 15,635,851(3) 54.6
2170 Piedmont Road, NE
Atlanta, Georgia
FMR Corporation........................................................................ 2,868,500(4) 10.0
82 Devonshire Street
Boston, Massachusetts
Richard A. Hubbell..................................................................... 276,608(5) 1.0
2170 Piedmont Road, NE
Atlanta, Georgia
Bobby Joe Cudd......................................................................... 0 0.0
2170 Piedmont Road, NE
Atlanta, Georgia
James A. Lane, Jr...................................................................... 134,130(6) 0.5
2170 Piedmont Road, NE
Atlanta, Georgia
Ben M. Palmer.......................................................................... 23,100(7) 0.1
2170 Piedmont Road, NE
Atlanta, Georgia
All Directors and Executive Officers as a group (11 persons)........................... 19,138,810(8) 66.8
</TABLE>
2
<PAGE>
(1) Except as otherwise noted, the nature of the beneficial ownership for all
shares is sole voting and investment power.
(2) Includes 390,014 shares of the Company held as Trustee, Guardian, or
Custodian for his children or as Custodian for the children of his brother,
Gary W. Rollins. Also includes 1,385,560 shares of the Company in four
trusts of which he is a Co-Trustee and as to which he shares voting and
investment power. Also includes 12,493,828 shares owned by LOR, Inc. Mr.
Rollins is an officer, director and stockholder of LOR, Inc. Also includes
345,600 shares owned Rollins Holding Company, Inc. Mr. Rollins is an
officer, director and stockholder of Rollins Holding Company, Inc. Also
includes 271,453 shares held by Rollins Investment Fund, a Georgia general
partnership, of which Mr. Rollins is a general partner. Also includes 73,430
shares held by RWR Investment partnership, a Georgia limited partnership, of
which Mr. Rollins is a general partner. Also includes 168,288 shares
indirectly owned by Mr. O. Wayne Rollins' Estate. Mr. Rollins is the
Co-Executor and Co-Trustee of this estate. Does not include 21,780* shares
of the Company held by his wife.
(3) Includes 322,720 shares of the Company held as Trustee or Custodian for his
children or as Custodian for the grandchildren
of his brother, R. Randall Rollins. Also includes 1,358,680 shares of the
Company in four trusts of which he is Co-Trustee and as to which he shares
voting and investment power. Also includes 12,493,828 shares owned by LOR,
Inc. Mr. Rollins is an officer, director and stockholder of LOR, Inc. Also
includes 345,600 shares owned by Rollins Holding Company, Inc. Mr. Rollins
is an officer, director and stockholder of Rollins Holding Company, Inc.
Also includes 271,453 shares held by Rollins Investment Fund, a Georgia
general partnership, of which Mr. Rollins is a general partner. Also
includes 168,288 shares indirectly owned by Mr. O. Wayne Rollins' Estate.
Mr. Rollins is the Co-Executor and Co-Trustee of this estate. Does not
include 100,004* shares of the Company held by his wife.
(4) Based on information received by the Company, an aggregate of 2,868,500
shares are indirectly held by FMR Corporation. FMR has sole dispositive
power with respect to all of these shares and has no voting power with
respect to any of these shares. Fidelity Management and Research Company
("Fidelity"), a wholly owned subsidiary of FMR Corporation, and Fidelity
Low-Priced Stock Fund, an investment company for which Fidelity acts as an
investment advisor, are also the beneficial owners of these shares. Fidelity
votes these shares pursuant to guidelines established by the Board of
Trustees of the Fund.
(5) Includes 64,000 shares subject to exercisable options and 133,000 shares of
restricted stock awards.
(6) Includes 40,000 shares of restricted stock awards.
(7) Includes 6,000 shares subject to exercisable options and 16,200 shares of
restricted stock awards.
(8) Shares held in trusts as to which more than one officer and/or director are
Co-Trustees have been included only once. Includes an aggregate of 288,000
shares which may be purchased by 4 executive officers upon exercise of
currently exercisable options or restricted stock grants awarded to or
earned by them pursuant to the Company's 1984 Incentive Stock Option Plan
and 1994 Employee Stock Incentive Plan.
* Messrs. R. Randall Rollins and Gary W. Rollins disclaim any beneficial
interest in these holdings.
ELECTION OF DIRECTORS
Three individuals are to be elected at the Annual Meeting to serve as Class
I directors for a term of three years, and until the election and qualification
of their successors. Six other individuals serve as directors but are not
standing for re-election because their terms as directors extend past this
Annual Meeting pursuant to provisions of the Company's Bylaws which provide for
the election of directors for staggered terms, with each director serving a
three-year term. Unless authority is withheld, the proxy holders will vote for
the election of the first three persons named below to three year terms as
directors. Although Management does not contemplate the possibility, in the
event any nominee is not a candidate or is unable to serve as a director at the
time of the election, unless authority is withheld, the proxies will be voted
for any nominee who shall be designated by the present Board of Directors to
fill such vacancy.
The name and age of each of the three nominees, his principal occupation,
together with the number of shares of Common Stock beneficially owned, directly
or indirectly, by him and the percentage of outstanding shares that ownership
represents, all as of the close of business on February 26, 1999, (according to
information received by the Company) are set out below. Similar information is
also provided for those directors whose terms expire in future years. Each
director was originally
3
<PAGE>
elected as a director shortly after incorporation of the Company in January
1984, with the exception of James A. Lane, Jr. and Richard A. Hubbell, who were
elected as directors on January 27, 1987.
<TABLE>
<CAPTION>
PERCENT OF
COMMON OUTSTANDING
NAMES OF NOMINEES PRINCIPAL OCCUPATION(1) AGE STOCK(2)* SHARES
- ---------------------------------------- ------------------------------------------------------ --- ---------- -------------
CLASS I (NEW TERM EXPIRES 2002)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
R. Randall Rollins(3)................... Chairman of the Board and Chief Executive Officer of
the Company; Chairman of the Board and Chief Executive
Officer of Rollins, Inc. (consumer services) (since
October 1991); Vice Chairman of the Board of Rollins,
Inc. (prior to October 1991). 67 15,651,647(4) 54.6
Henry B. Tippie......................... Chairman of the Board and Chief Executive Officer of
Tippie Services, Inc. (management services). 72 1,156,278(5) 4.0
James B. Williams....................... Chairman of the Executive Committee, SunTrust Banks,
Inc. (bank holding company) 65 40,000 0.1
</TABLE>
<TABLE>
<CAPTION>
NAMES OF DIRECTORS
WHOSE TERMS HAVE
NOT EXPIRED
- ---------------------
CLASS II (TERM EXPIRES 2000)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John W. Rollins(3)...................... Chairman of the Board and Chief Executive Officer of
Rollins Truck Leasing Corp. (vehicle leasing and
transportation); and Chairman of the Board of Dover
Downs Entertainment Stock, Inc. (operator of a
multi-purpose gaming and entertainment complex since less than
October 1996). 82 12,408(6) 0.1
Bobby Joe Cudd.......................... Executive Vice President of the Company; President of
Cudd Pressure Control, Inc. (subsidiary of the Com-
pany). 69 0 0.0
Richard A. Hubbell...................... President and Chief Operating Officer of the Company. 54 276,608(7) 1.0
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Class III (Term Expires 2001)
- ------------------------------------------------------------------------------------------------
Wilton Looney........................... Honorary Chairman of the Board of Genuine Parts Com- less than
pany (automotive parts distributor). 79 1,200 0.1
Gary W. Rollins(3)...................... President and Chief Operating Officer of Rollins, Inc.
(consumer services). 54 15,635,851(8) 54.6
James A. Lane, Jr....................... Executive Vice President of the Company; President of
Chaparral Boats, Inc. (subsidiary of the Company). 56 134,130(9) 0.5
</TABLE>
(1) Unless otherwise noted, each of the directors has held the positions of
responsibility set out in this column (but not necessarily his present
title) for more than five years. In addition to the directorships listed in
this column, the following individuals also serve on the boards of directors
of the following companies: Henry B. Tippie: Rollins Truck Leasing Corp.,
Safety-Kleen Corporation, Matlack Systems, Inc. and Dover Downs
Entertainment, Inc.; John W. Rollins: Matlack Systems, Inc.; James B.
Williams: The Coca-Cola Company, Genuine Parts Company, Sonat, Inc., and
Georgia-Pacific Corporation; Gary W. Rollins: Rollins Truck Leasing Corp.;
R. Randall Rollins: SunTrust Banks, Inc., SunTrust Banks of Georgia and
Dover Downs Entertainment, Inc. All of the directors shown in the above
table, with the exception of Messrs. Hubbell, Lane and Cudd, are also
directors of Rollins, Inc.
(2) Except as otherwise noted, the nature of the beneficial ownership for all
shares is sole voting and investment power.
(3) R. Randall Rollins and Gary W. Rollins are brothers. John W. Rollins is
their uncle.
(4) See information contained in footnote (2) to the table appearing in Capital
Stock section.
4
<PAGE>
(5) Includes 906,278 shares of Common Stock of the Company in trusts of which he
is a Trustee or Co-Trustee and as to which he shares voting and investment
power.
(6) Does not include 15,608 shares held by his wife as custodian for his
children. Mr. Rollins disclaims any beneficial interest in these holdings.
(7) See information contained in footnote (5) to the table appearing in Capital
Stock section.
(8) See information contained in footnote (3) to the table appearing in Capital
Stock section.
(9) See information contained in footnote (6) to the table appearing in Capital
Stock section.
BOARD OF DIRECTORS COMPENSATION, COMMITTEES AND MEETINGS
During 1998 non-employee Directors received from the Company $1,000 for each
meeting of the Board of Directors or committee they attended, plus $10,000 per
year.
The Audit Committee of the Board of Directors of the Company consists of
Henry B. Tippie, Chairman, Wilton Looney and James B. Williams. The Audit
Committee held two meetings during the fiscal year ended December 31, 1998. Its
functions are to select a firm of independent public accountants whose duty it
is to audit the books and accounts of the Company and its subsidiaries for the
fiscal year for which they are appointed and to monitor the effectiveness of the
audit effort and the Company's financial and accounting organization and
financial reporting. The Compensation Committee of the Board of Directors of the
Company consists of Henry B. Tippie, Chairman, Wilton Looney and James B.
Williams. It held one meeting during the fiscal year ended December 31, 1998.
The functions of the Compensation Committee are to review the Company's
executive compensation structure and to report to the Board any changes to
insure continued effectiveness. The Board of Directors met four times during the
fiscal year ended December 31, 1998. The Company does not have a nominating
committee of the Board of Directors. No director attended fewer than 75 percent
of Board Meetings and meetings of committees on which he served during the
fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the directors named above who serve on the Company's Compensation
Committee are or have ever been employees of the Company. No executive officer
of the Company serves on a Compensation Committee of another company. R. Randall
Rollins, an executive of the Company, serves on the Board of Directors of both
SunTrust Banks, Inc. and SunTrust Banks of Georgia, a subsidiary of SunTrust
Banks, Inc. Mr. Williams is the Chairman of the Executive Committee, SunTrust
Banks, Inc. Mr. Rollins is not on the Compensation Committee of SunTrust Banks,
Inc., or SunTrust Banks of Georgia. All banking services provided to the Company
by SunTrust Banks of Georgia are priced at market-competitive rates.
5
<PAGE>
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the calendar years ended
December 31, 1998, 1997, and 1996 of those persons who were at December 31, 1998
(i) the chief executive officer and (ii) the other Named Executives of the
Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS (3)
--------------------------
ANNUAL RESTRICTED
COMPENSATION STOCK SECURITIES
--------------------- AWARDS UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($) (1) OPTIONS (#) COMPENSATION(2)
- -------------------------------- ----- --------- ---------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
R. Randall Rollins.............. 1998 $ 450,000 $ 0 0 0 $ 0
Chairman of the Board 1997 400,000 0 0 0 0
& Chief Executive Officer 1996 340,000 0 0 0 0
Richard A. Hubbell.............. 1998 400,000 100,000 0 50,000 1,920
President & Chief Operating 1997 350,000 175,000 150,000 20,000 1,920
Officer 1996 280,000 140,000 53,250 40,000 1,800
Bobby Joe Cudd.................. 1998 119,264 15,167 0 0 848
Executive Vice President, and 1997 110,090 36,680 0 0 1,419
President, Cudd Pressure 1996 118,254 0 0 0 1,419
Control
James A. Lane, Jr............... 1998 67,841 1,900,350 0 0 1,920
Executive Vice President, and 1997 67,841 1,532,744 0 0 1,920
President, Chaparral Boats, 1996 69,146 1,274,925 0 0 1,800
Inc.
Ben M. Palmer(4)................ 1998 137,500 31,250 102,000 10,000 1,920
Vice President, Chief 1997 117,500 31,250 75,000 10,000 1,674
Financial 1996 50,447 22,000 0 0 0
Officer, and Treasurer
</TABLE>
(1) The total number of shares held and their values on December 31, 1998 were
as follows: Mr. Hubbell, 120,000 shares valued at $885,000 of which 2,000
shares are subject to issuance upon meeting performance criteria as defined
in the related Performance Restricted Stock Agreement; Mr. Lane, 40,000
shares valued at $295,000; and Mr. Palmer, 18,000 shares valued at $132,750
of which 4,800 shares are subject to issuance upon meeting performance
criteria as defined in the related Performance Restricted Stock Agreement.
The December 31, 1998 values are based on the December 31, 1998 closing
market stock price of $7.375 and do not take into account any diminution of
value attributable to vesting provisions on these shares. Time-Lapse
Restricted Stock vests ten years from the date of grant. This stock is
forfeited if the employment of the Named Executive terminates prior to
vesting for reasons other than death, retirement or permanent disability.
During these ten years, grantees receive all dividends declared and retain
voting rights for the granted shares. Performance Restricted Stock is
granted, but not earned and issued, until certain five year tiered
performance criteria are met. The performance criteria are predetermined
market prices of the Company's stock. On the date the stock appreciates to
each level (determination date), 20 percent of performance shares are
earned. Once earned, the stock vests five years from the determination date.
After the determination date, the grantee will receive all dividends
declared and also voting rights to the shares.
(2) Effective July 1, 1984, the Company adopted the RPC, Inc. 401(k) Plan
("401(k) Plan"), a qualified retirement plan designed to meet the
requirements of Section 401(k) of the Internal Revenue Code. The 401(k) Plan
provides for a matching contribution of forty cents ($.40) for each one
dollar ($1.00) of a participant's contribution to the 401(k) Plan, not to
exceed 3 percent of his or her annual compensation (which includes
commissions, overtime and bonuses). A participant's voluntary pretax salary
deferrals made under the 401(k) Plan are in lieu of payment of compensation
to the participant. The amounts shown in this column represent the Company
match for the Named Executives.
(3) All share amounts reflect the December, 1997 two-for-one stock split.
(4) Compensation for 1996 reflects compensation received from July 8, 1996, the
date on which Mr. Palmer became employed by the Company.
6
<PAGE>
OPTION/SAR GRANTS IN FISCAL YEAR 1998
The following table sets forth stock options granted in the fiscal year
ending December 31, 1998 to each of the Company's Named Executives. Employees of
the Company and its subsidiaries are eligible for stock option grants based on
individual performance. The table also sets forth the hypothetical gains that
would exist for the options at the end of their ten-year term, assuming compound
rates of stock appreciation of five percent and ten percent. The actual future
value of the options will depend on the market value of the Company's Common
Stock. All option exercise prices are based on the market price on the grant
date.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
-------------------------------------------------------------
PERCENT POTENTIAL REALIZABLE
NUMBER OF OF TOTAL VALUE AT ANNUAL
SECURITIES OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM (2)
GRANTED IN FISCAL BASE PRICE EXPIRATION ----------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------ ------------- ----------------- ------------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C> <C>
R. Randall Rollins............ 0 -- -- -- -- --
Richard A. Hubbell............ 50,000(3) 23% 12.75 01/27/08 400,920 1,016,011
Bobby Joe Cudd................ 0 -- -- -- -- --
James A. Lane, Jr............. 0 -- -- -- -- --
Ben M. Palmer................. 10,000(4) 5% 12.75 01/27/08 80,184 203,202
</TABLE>
(1) Options were granted on January 27, 1998 at a price of $12.75 per share. No
Stock Appreciation Rights were granted to the Named Executives during 1998.
(2) These amounts, based on assumed appreciation rates of five percent and ten
percent as prescribed by the Securities and Exchange Commission rules, are
not intended to forecast possible future appreciation, if any, of the
Company's stock price. These numbers do not take into account certain
provisions of options providing for termination of the option following
termination of employment, nontransferability or phased-in vesting. The
Company did not use an alternative formula for a grant date valuation as it
is not aware of any formula which will determine with reasonable accuracy a
present value based on future unknown or volatile factors. Future
compensation resulting from option grants is based solely on the performance
of the Company's stock price.
(3) These Stock Options expire after ten years. Of the total granted to Mr.
Hubbell, 20,068 are incentive stock options, and 29,932 are non-qualified.
The incentive stock options vest and become exercisable over five years as
follows: 7% in the first year, 13% in the second and third years, 27% in the
fourth year, and 40% in the fifth year. The non-qualified options vest and
become exercisable over five years as follows: 29% in the first year, 24% in
the second and third years, 15% in the fourth year, and 8% in the fifth
year.
(4) These Incentive Stock Options vest and become exercisable 20 percent each
year over five years and expire after ten years.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1998
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S OPTIONS/SAR'S
AT FY-END (#) AT FY-END ($)(1)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------- ------------------ ------------- ---------------- -------------------
<S> <C> <C> <C> <C>
R. Randall Rollins..................... 0 0 0/0 0/0
Richard A. Hubbell..................... 0 0 70,200/94,400 246,988/85,350
Bobby Joe Cudd......................... 0 0 0/0 0/0
James A. Lane, Jr...................... 0 0 0/0 0/0
Ben M. Palmer.......................... 0 0 2,000/18,000 0/0
</TABLE>
(1) Based on the closing price of Company Common Stock on the New York Stock
Exchange on December 31, 1998 of $7.375 per share.
7
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE OTHER COMPANY FILINGS, INCLUDING
THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND THE
PERFORMANCE GRAPH INCLUDED HEREIN SHALL NOT BE INCORPORATED BY REFERENCE INTO
ANY SUCH FILINGS.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
OVERVIEW
During the fiscal year 1998, the members of the Compensation Committee of
the Board of Directors held primary responsibility for determining executive
compensation levels. The Compensation Committee is comprised of outside
directors who are not eligible to participate in the plans and over whose name
this report is presented.
The Company is engaged in highly competitive industries. The actions of the
executive officers have a profound impact on the short-term and long-term
profitability of the Company; therefore, the design of the executive officer
compensation package is very important. In order to retain key employees, the
Company has an executive compensation package that is driven by an increase in
shareholder value, the overall performance of the Company, and the individual
performance of the executive. The measures of the Company's performance include
revenue and net income.
Pursuant to the above compensation philosophy, the three main components of
the executive compensation package are base salary, cash incentive plans, and
stock based incentive plans.
BASE SALARY
The factors subjectively used in determining base salary include the recent
profit performance of the Company, the magnitude of responsibilities, the scope
of the position, individual performance, and the pay received by peers in
similar positions in the same geographic area. These factors are not used in any
specific formula or weighting. The salaries of the Named Executives are reviewed
annually. Increases to base salaries for the Named Executives ranged up to 20
percent based on individual performance.
CASH BASED INCENTIVE PLANS
The Company has individualized cash based incentive plans developed to
reward individual performance. The Company includes several subsidiaries
conducting business in unrelated industries, so each compensation plan was
designed to be motivational and appropriate, based on the norms in that
industry.
The annual cash based incentive compensation package for the executive
officers is developed by the Chief Executive Officer of the Company prior to the
end of each fiscal year. It is based upon performance objectives for the ensuing
fiscal year. The Named Executives participate in a variety of individualized
performance bonus plans designed to encourage achievement of short-term
objectives. These plans all have payouts subjectively based on net income,
budget objectives, and other individual specific performance objectives. The
specific performance objectives relate to each executive improving the
contribution of his functional area of responsibility to further enhance the
earnings of the Company. The performance objectives and incentive package are
then reviewed by the Committee and are either accepted or modified. The Chief
Executive Officer does not participate in the cash incentive plans.
One of the Named Executives, James A. Lane, Jr. has an employment agreement
with the Company that was first entered into as part of the Company's
acquisition of Chaparral Boats, Inc. on November 4, 1986. Under this agreement,
Mr. Lane receives an annual cash incentive bonus of 10 percent of pretax profit
of Chaparral Boats, Inc. This incentive payment was approximately 97 percent of
the total cash compensation paid to this executive in 1998. During 1998, Mr.
Lane
8
<PAGE>
received in excess of $1 million in aggregate compensation (the maximum amount
for which an employer may claim a compensation deduction, pursuant to Section
162(m) of the Internal Revenue Code of 1986, as amended, unless certain
performance related compensation exemptions are met during one fiscal year.) The
Company obtained stockholder approval of this agreement at the April 25, 1995
Stockholders' Meeting in order to qualify for the performance related
compensation exemption.
STOCK BASED INCENTIVE PLANS
Awards under the Company's Stock Option Plans are purely discretionary, and
are not based on any specific formula and may or may not be granted in any given
fiscal year. Grants are made under the Plan by and the Plan is administered by
non-employee directors within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended. When considering the grant of stock options,
the Compensation Committee gives consideration to the overall performance of the
Company and the performance of individual employees. The Chief Executive
Officer, R. Randall Rollins, maintains significant ownership interest in the
Company, and was, therefore, not considered for grants in 1998 under the 1994
Employee Stock Incentive Plan. During the fiscal year 1998, the Named Executives
were granted a total of 60,000 Stock Options and were awarded 4,000 shares of
Time Lapse Restricted Stock and 4,000 shares of Performance Restricted Stock. In
general, these grants were based upon the scope of the position and the
individual performance of each individual.
Except as discussed for Mr. Lane above, the Committee thinks it unlikely
that any participants in the Company's stock plans will, in the foreseeable
future, receive in excess of $1 million in aggregate compensation (the maximum
amount for which an employer may claim a compensation deduction pursuant to
Section 162(m) of the Internal Revenue Code of 1986, as amended, unless certain
performance related compensation exemptions are met) during any fiscal year, and
has therefore, determined that since the exemption requirement does not apply,
the Company will not change its various compensation plans, or otherwise meet
the requirements of such exemption, at this time.
CEO PAY
The CEO's compensation is determined by the Compensation Committee. For
fiscal year 1998, the cash compensation of R. Randall Rollins, Chairman and
Chief Executive Officer, was $450,000. This represents the total compensation
for Mr. Rollins, no portion of which was in performance driven bonuses or stock
based incentive plans. As is the case with respect to the other Named
Executives, the CEO's compensation is based upon the long-term growth in net
income, stockholder value improvements as well as the CEO's individual
performance. The decision of the Committee is subjective and is not based upon
any specific formula or guidelines. The CEO does not participate in the
deliberations of the Committee when his salary or incentive is determined.
Neither the CEO nor any other member of the Compensation Committee participates
in any Company incentive program.
COMPENSATION COMMITTEE
Henry B. Tippie, Chairman
Wilton Looney
James B. Williams
9
<PAGE>
COMMON STOCK PERFORMANCE
As part of the executive compensation information presented in this Proxy
Statement, the Securities and Exchange Commission requires a 5-year comparison
of the cumulative total stockholder return based on the performance of the stock
of the Company, assuming dividend reinvestment, as compared with both a broad
equity market index and an industry or peer group index. The indices included in
the following graph are the S & P 500 Index and a peer group which includes
companies that are considered peers of the subsidiaries of the Company. The
companies included in the peer group have been weighted according to each
respective issuer's stock market capitalization at the beginning of each year.
The companies are Brunswick Corporation which competes with the Company's boat
manufacturing subsidiary; and Weatherford International, Inc. (formerly known as
Weatherford Enterra, Inc.), which competes with one of the largest oil and gas
services subsidiaries of the Company.
COMPARISON OF FIVE-YEAR
CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RPC COMMON STOCK S&P 500 PEER GROUP
<S> <C> <C> <C>
12/31/93 100 100 100
12/31/94 89.69 101.32 106.23
12/31/95 107.34 139.40 145.00
12/31/96 176.47 171.40 171.97
12/31/97 279.02 228.59 263.30
12/31/98 176.66 293.91 165.59
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to June 30, 1984, the Company was a wholly-owned subsidiary of
Rollins, Inc. ("Rollins"). On June 30, 1984, Rollins effected a spin-off
distribution to its stockholders of all of the outstanding shares of the Company
(the "Spin-off"). Messrs. Gary W. Rollins and R. Randall Rollins, named in the
table under "Capital Stock" on page 2, have substantially similar interests in
Rollins.
The Company receives certain administrative services from Rollins. The
service agreements between Rollins and the Company provide for the provision of
services on a cost reimbursement basis and are terminable on six months notice.
The services covered by these agreements include administration of certain
employee benefit programs and other administrative services. Charges to the
Company (or to corporations which are subsidiaries of the Company) for such
services aggregated $425,019 in 1998.
10
<PAGE>
BENEFIT PLANS
The Company's Retirement Income Plan, effective July 1, 1984, is a trusteed
defined benefit pension plan. The amounts shown on the following table are those
annual benefits payable for life on retirement at age 65. The amounts computed
in the following table assume: (a) that the participant remains in the service
of the Company until his normal retirement date at age 65; (b) that the
participant's earnings continue at the same rate as paid in the fiscal year
ended December 31, 1998 during the remainder of his service until age 65; (c)
that the normal form of benefit is a single-life annuity, and (d) that the Plan
continues without substantial modification. The column entitled remuneration
represents all compensation in the Summary Compensation Table included herein.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
REMUNERATION 15 20 25 30 35
- ------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 45,000
200,000 45,000 60,000 75,000 90,000 90,000
300,000 67,500 90,000 112,500 135,000 135,000
400,000 90,000 120,000 150,000 180,000 180,000
500,000 112,500 150,000 187,500 225,000 225,000
600,000 135,000 180,000 225,000 270,000 270,000
700,000 157,500 210,000 262,500 315,000 315,000
800,000 180,000 240,000 300,000 360,000 360,000
900,000 202,500 270,000 337,500 405,000 405,000
1,000,000 225,000 300,000 375,000 450,000 450,000
</TABLE>
The above table does not reflect the Plan offset for Social Security average
earnings, the maximum benefit limitations under Section 415 of the Internal
Revenue Code of 1986, as amended (the "Code"), or the maximum compensation
limitation under Section 401(a)(17) of the Code.
Retirement income benefits are based on the average of the employee's
compensation from the Company for the five consecutive complete calendar years
of highest compensation during the last ten consecutive complete calendar years
("final average compensation") immediately preceding the employee's retirement
date or, if earlier, the date of his termination of employment. All full-time
corporate employees of the Company and its subsidiaries (other than employees
subject to collective bargaining agreements) are eligible to participate in the
Retirement Income Plan after completing 1 year of service as an employee. The
benefit formula is 1 1/2 percent of final average compensation less 3/4 percent
of final average FICA earnings multiplied by years of service (maximum 30
years). The Plan also provides reduced early retirement benefits under certain
conditions. In accordance with the Code, the maximum annual benefit that could
be payable to a Retirement Income Plan beneficiary in 1998 was $130,000.
However, this limitation does not affect previously accrued benefits of those
individuals who became entitled to benefits in excess of $130,000 prior to the
effective date of the applicable provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Tax Reform Act of 1986. In accordance with
the Code (as amended by the Omnibus Budget Reconciliation Act of 1993), the
maximum compensation recognized by the Retirement Income Plan was $160,000 in
1998. Retirement benefits accrued at the end of any calendar year will not be
reduced by any subsequent changes in the maximum compensation limit.
Participants in the Rollins, Inc. Retirement Income Plan who transferred their
employment to the Company as a result of the Spin-off participated immediately
in the Plan. The current credited years of service for the five individuals
named in the executive compensation table are: R. Randall Rollins--30, Bobby Joe
Cudd--21, Richard A. Hubbell--12, James A. Lane, Jr.--11, Ben M. Palmer--2.
11
<PAGE>
Effective July 1, 1984, the Company adopted a qualified retirement plan
designed to meet the requirements of Section 401(k) of the Code ("401(k) Plan").
The only form of benefit payment under the 401(k) Plan is a single lump-sum
payment equal to the balance in the participant's account on the date the
distribution is processed. Under the 401(k) Plan, the full amount of a
participant's accrued benefit is payable upon his termination of employment,
attainment of age 59 1/2 (with respect to pre-tax deferrals only), retirement,
total and permanent disability, or death. Amounts contributed to the accounts of
Named Executives for 1998 under this plan are reported in the "All Other
Compensation" column of the Summary Compensation Table included herein.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the auditors for the Company for the fiscal
year ended December 31, 1998. As is its policy, upon the recommendation of the
Audit Committee, the Board of Directors shall select a firm of independent
public accountants for fiscal 1999. It is anticipated that a representative of
Arthur Andersen LLP will be present at the Annual Meeting to answer questions
and make a statement should such representative so desire.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company has completed a review of Forms 3, 4, and 5 and amendments
thereto furnished to the Company by all Directors, Officers and greater than 10
percent stockholders subject to the provisions of Section 16 of the Securities
Exchange Act of 1934. In addition, the Company has a written representation from
all Directors, Officers and greater than 10 percent stockholders from whom no
Form 5 was received, indicating that no Form 5 filing was required. Based solely
on this review, the Company believes that filing requirements of such persons
under Section 16 for the fiscal year ended December 31, 1998 have been
satisfied.
STOCKHOLDER PROPOSALS
Appropriate proposals of stockholders intended to be presented at the
Company's 2000 Annual Meeting of Stockholders pursuant to Rule 14a-8 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), must
be received by the Company by December 3, 1999 for inclusion in its Proxy
Statement and form of proxy relating to that meeting. In addition, all
stockholder proposals submitted outside of the stockholder proposal rules
promulgated pursuant to Rule 14a-8 under the Exchange Act must be received by
the Company by February 16, 2000 in order to be considered timely. If such
stockholder proposals are not timely received, proxyholders will have
discretionary voting authority with regard to any such stockholder proposals
which may come before the Annual Meeting. With regard to such stockholder
proposals, if the date of the 2000 Annual Meeting is subsequently advanced or
delayed by more than 30 days from the date of the 1999 Annual Meeting, the
Company shall, in a timely manner, inform stockholders of the change and the
date by which proposals must be received.
VOTING PROCEDURES AND VOTE REQUIRED
The Chairman of the Board of Directors of the Company will select a
representative of the Company's transfer agent as Inspector of the Election, to
determine the eligibility of persons present at the Meeting to vote and to
determine whether the name signed on each proxy card corresponds to the name of
a stockholder of the Company. The Inspector shall also determine whether or not
a quorum of the shares of the Company (consisting of a majority of the votes
entitled to be cast at the Meeting) exists at the Meeting. Abstentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. If a quorum exists and a vote is
taken at the Meeting, the Inspector shall tabulate (i) the votes cast for or
against each proposal or nominee for director and (ii) the abstentions in
respect of each proposal.
12
<PAGE>
In accordance with the Delaware General Corporation Law, the election of the
nominees named herein as directors will require the affirmative vote of a
plurality of the votes cast by the shares of Company Common Stock entitled to
vote in the election provided that a quorum is present at the Meeting. In the
case of a plurality vote requirement (as in the election of directors), where no
particular percentage vote is required, the outcome is solely a matter of
comparing the number of votes cast in favor of each nominee, and hence only
votes for a nominee (and not abstentions or broker non-votes) are relevant to
the outcome.
MISCELLANEOUS
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 is being mailed to stockholders with this proxy statement.
Management knows of no business other than the matters set forth herein
which will be presented at the meeting. Inasmuch as matters not known at this
time may come before the meeting, the enclosed proxy confers discretionary
authority with respect to such matters as may properly come before the meeting;
and it is the intention of the persons named in the proxy to vote in accordance
with their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
Linda H. Graham, Secretary
Atlanta, Georgia
April 1, 1999
13
<PAGE>
ANNEX
RPC, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF RPC, INC.
FOR ANNUAL MEETING OF STOCKHOLDERS TUESDAY, APRIL 27, 1999, 9:00 A.M.
The undersigned hereby constitutes and appoints GARY W. ROLLINS and R.
RANDALL ROLLINS, and each of them, jointly and severally, proxies, with full
power of substitution, to vote all shares of Common Stock which the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on April
27, 1999, at 9:00 A.M. at 2170 Piedmont Road, NE, Atlanta, Georgia, or any
adjournment thereof.
The undersigned acknowledges receipt of Notice of the aforesaid Annual
Meeting and Proxy Statement, each dated April 1, 1999, grants authority to said
proxies, or either of them, or their substitutes, to act in the absence of
others, with all the powers which the undersigned would possess if personally
present at such meeting and hereby ratifies and confirms all that said proxies
or their substitutes may lawfully do in the undersigned's name, place and stead.
The undersigned instructs said proxies, or either of them, to vote as follows:
<TABLE>
<S> <C> <C> <C>
1. / / FOR R. Randall Rollins, Henry B. / / FOR all Class I nominees, / / ABSTAIN from voting for the
Tippie, and James B. Williams as EXCEPT AS INDICATED BELOW election of all Class I nominees
Class I Directors
</TABLE>
(INSTRUCTIONS: TO REFRAIN FROM VOTING FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
- --------------------------------------------------------------------------------
2. ON ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
(OVER)
<PAGE>
RPC, INC.
ALL PROXIES SIGNED AND RETURNED WILL BE VOTED OR NOT VOTED IN ACCORDANCE
WITH YOUR INSTRUCTIONS, BUT THOSE WITH NO CHOICE WILL BE VOTED "FOR" THE
ABOVE-NAMED NOMINEES FOR DIRECTOR. THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
PROXY
Please sign below, date and return
promptly.
___________________________________
___________________________________
Signature
Dated: ______________________, 1999
(Signature should conform to name and
title stenciled hereon. Executors,
administrators, trustees, guardians
and attorneys should add their title
upon signing.)
NO POSTAGE REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
